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Memo While we do not have complete records to show the accruals of val- uat^Jijis and depreciation at different periods, we find that on January 1, 1924 the value of our water system was $16,509.86, and after addding^thru Work Order VP-12^- $3540.88, the total investment on December 31, 1924 was $20,050.74. Accrued depreciation on December 31, 1924 was $16,274.71 and it appears that prior to starting replacements under Work Order VP-12, our ? \ ? entire water system had practically been depredated. This Work Order involved an expenditure of $20,542.75, charges being made to Operating Expense $17,001.87, Investment $3,540.88. ^hese t iuvJ-L . ' < U)yi'i-V charges were based on Mr. Barry s letter of November 15, 1923, 'file D-301. However, it seems to me that where the entire system had been depreciated,^ that the original value of the parts to be replaced should have been charged to that account, and all in excess of that amount should have been charged to Investment Accounts, inasmuch as the value of our improved sys­tem would be greater than the value of our original system which was com­posed of smaller pipe lines. Also as, had the exhorbitant charge of $17,000.00 which was made to Operating Expense, been charged to Invest­ments, we would have been entitled to earn a fair profit on thatanount. ./Uml/ I^YO pb "Y'\ ^ v5-/- 5' 'Yo s'7 ^ n r*ig. yf y